Health insurance for dummies: 6 essential questions and answers

Taking the confusion out of Health Insurance, we have picked up the 6 most basic Health Insurance questions every policy holder must have the answer to.

1. Why do I need health insurance?

To give you peace of mind by helping you afford medical care in case of a serious illness or injury, the cost of which is constantly increasing in India.

To motivate you to take care of your health, since a deterioration can increase the premiums you pay.

2. How does health insurance work?

Based on how you can make a claim, there are two ways health insurance policies are designed:

Reimbursement claim- You share your original hospitalisation bills with your insurer after you’ve been treated and they reimburse you based on actuals.

Cashless claim- You go to a networked hospital, and after receiving your treatment, sign relevant forms, and let your insurer make payments on your behalf.

3. How do you get Health insurance?

Most people get health insurance through their employers or from the organizations to which they belong. This is called group insurance.
Some people do not have access to group insurance. They may choose to purchase their own individual health insurance directly from an insurance company.
Families can also opt for family floater plans that cover multiple members of the family under one.
If you already have a health insurance policy but want to get another one to increase coverage, make sure you disclose this fact from the start, to avoid rejection of claim from either of your insurers.

4. What types of health insurance policies are available in India?

Hospitalization plans are indemnity plans that compensate you for the hospitalization and medical costs you have incurred, up to the sum insured. The sum insured can be applied on a per member basis in case of individual health policies or on a floater basis in case of family floater policies.

Top up plans are meant specifically for people who are already covered by their employer’s health insurance plans are only looking to get protection against certain situations that the employer’s plan does not cover

Critical Illness plans are benefit based policies which pay a lump sum amount on diagnosis of any of the covered critical illnesses and medical procedures. These illnesses are usually specific to a particular severity and frequency of occurrence, and thus their treatment tends to cost a lot.?

5. Isn’t the health insurance my company provides enough?

It is definitely a possibility. However, group insurance plans offered by most employers:

Are not customised to your specific needs and conditions, unlike an individual policy wherein you can choose to be covered against exactly what you want
Are not available to you when you are in-between jobs and most startups do not offer this benefit to their employees
Might have a specified sum assured that covers all employees together. If one employee makes a claim due to an injury/illness, that leaves less cover for the rest of the employees
May not cover all your family members.

6. What happens if I have a pre-existing medical condition i.e. if I am already diagnosed with an illness?

Every insurer has a set of underwriting guidelines which they follow to assign a ‘risk class’ to you depending on how much of a risk they face by accepting your application to be a policy holder

An insurer can choose to add a waiting period to your policy before which the policy does not come into effect, or
Agree to a life time exclusion wherein they protect you against complications other than the ones caused by your pre-existing condition, or
Ask you to pay a higher premium, or
Deny your application for insurance cover
Remember

Full Disclosure is essential. Never lie to your insurer about any medical conditions you are aware of having, be it verbally or by any other means of communication.

A terminal illness is a rapidly advancing and incurable medical condition. When diagnosed with a terminal illness, there is no option but to resort to palliative care because the victim has a lowered life expectancy.

It is important to have sufficient health insurance cover in order to meet medical emergencies. It is equally important to understand the provisions of any health insurance product that you may be holding, to avoid unpleasant surprises at the time of making a claim.